House Republican Leader Themis Klarides said the passage of the compromise state budget after nearly four months of the fiscal year closes the $3.5 billion deficit without raising income taxes and includes historic spending constraints.
”The budget we have put in place includes historic spending constraints that will hedge against future deficits. While this budget is not perfect, it reflects the core Republican components of spending restraints, less borrowing so that we can finally start living within our means,’’ Klarides said.
She added, “This is a day of hope for the people of Connecticut.’’
The budget passed 126-23 at 12:40 p.m. after several hours of debate, a margin that overturns a
veto by the governor.
Klarides said the state will be able to close the massive deficit with less than a 1 percent increase in taxes and fees. The bulk of the tax hikes are on cigarette sales and the hospital taxes that will be refunded by the federal government once the state completes its application to the federal agency that administers Medicaid and Medicare.
The budget features a variety of spending constraints:
An annual bonding cap of $1.9 billion in borrowing, a half billion less than what Connecticut put on its credit card last year;
A revenue cap that prevents the state from spending all the money it expects to take in annually. Somehow we always seem to fall short of revenue projections;
A volatility cap that will automatically send any excess revenue to the Budget Reserve Fund.
Current law allows state employee union contracts to go into effect without a vote by the legislature. In a huge concession reached during negotiations with Democratic leaders, votes by the House and Senate will be required before a contract can become law.